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Based on Jazz Pharmaceuticals plc's (NASDAQ:JAZZ) earnings update on 31 December 2018, analyst consensus outlook appear cautiously subdued, with profits predicted to rise by 5.0% next year against the higher past 5-year average growth rate of 27%. Currently with trailing-twelve-month earnings of US$447m, we can expect this to reach US$470m by 2020. Below is a brief commentary around Jazz Pharmaceuticals's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
How is Jazz Pharmaceuticals going to perform in the near future?
The 19 analysts covering JAZZ view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. I've plotted out each year's earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of JAZZ's earnings growth over these next few years.
From the current net income level of US$447m and the final forecast of US$797m by 2022, the annual rate of growth for JAZZ’s earnings is 14%. EPS reaches $14.42 in the final year of forecast compared to the current $7.45 EPS today. With a current profit margin of 24%, this movement will result in a margin of 32% by 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Jazz Pharmaceuticals, there are three key aspects you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Jazz Pharmaceuticals worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Jazz Pharmaceuticals is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Jazz Pharmaceuticals? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.